Growing Demand in Automotive Industry is Expected to Propel the Growth of the Methanol Market

The Methanol Market is predicted to grow at a CAGR of 3.5% during the forecast period of 2022-2027 and reach the market value of US$37.1 billion by 2027. The growth of the methanol market will be significantly dependent on the automotive industry. Methanol is also known as wood alcohol which is a colorless volatile liquid comprising of a sweet pungent odor. Methanol is an organic chemical and the simplest form of an alcohol group. It is extensively used as an engine fuel and produced using steam-forming of natural gas in order to produce synthesis gas. It is utilized to produce several chemicals that remove water from aviation and automotive fuel. It has emerged as a clean energy resource in the transportation industry where it is used to fuel trucks, buses, fuel cells and ships. 

On the basis of the end-use industry, the methanol market can be segmented into automotive, electrical and electronics, building and construction, marine, agriculture, water treatment and others. The automotive segment is expected to grow at the fastest CAGR of 5.2% during the forecast period of 2022-2027. This growth is mainly attributed to the extensive use of Methanol in LED substrates. This growth is mainly attributed to the adoption of methanol as a clean energy source in the automotive industry. In vehicles, it is used as a potential alternative for gasoline owing to its high octane and clean burning capability. It can be utilized as a marine fuel, vehicle fuel and also as biodiesel which acts as a substitute for conventional fuel. For instance, as per Organisation Internationale des Constructeurs d'Automobiles (OICA), all vehicle production reached 80 million units in 2021, up 77.7 million units from 2020. Thus, growth in automotive production is boosting the demand for the methanol market.

On the basis of geography, the methanol market can be categorized into North America, Europe, Asia-Pacific, South America and the Rest of the World. According to Industry Arc’s analysis, Asia Pacific has emerged as one of the most lucrative regions in the market. In 2021, the Asia Pacific region held a market share of 56.1% in the overall market. This growth is mainly attributed to the presence of several end-use industries such as automotive, agriculture, building and construction, pharmaceutical and others. Methanol has used an ingredient to produce a variety of chemicals and other products which is further employed in a wide range of end-use industries. For instance, according to Organisation Internationale des Constructeurs d'Automobiles, China accounted for around 33% of the world's automotive production whereas Japan and India accounted for 10% and 5% respectively in the global automotive production. Thus, the presence of several industries and an increase in automotive production fueled the market growth. The Asia Pacific is followed by North America which is expected to gain demand for the methanol market. The major countries in North America include the USA, Canada and Mexico.

The key companies holding a major share in the methanol market are Sabic, BASF, Methanex Corporation, Helm AG, Mitsubishi Gas, Petronas, Mitsui & Co., Celanese Corporation, LyondellBasell and OCI N.V.